ITEM 1. BUSINESS
We are an independent servicer and originator of mortgage loans and servicer of reverse mortgage loans. We service a wide array of loans across the credit spectrum for our own portfolio and for GSEs, government agencies, third-party securitization trusts and other credit owners. Through our consumer, correspondent and wholesale lending channels, we originate and purchase residential mortgage loans that we predominantly sell to GSEs and government agencies. We also operate two complementary businesses: asset receivables management and real estate owned property management and disposition.
We are a Maryland corporation incorporated in 1997 and operate throughout the U.S. In April 2009, we were spun off from Walter Energy. From 2009 through 2014, we grew our servicing and originations businesses both organically and through a number of acquisitions and servicing rights acquisitions. Beginning in 2016, we began to sell our servicing rights while retaining subservicing.
On February 11, 2019, Ditech Holding Corporation and certain of its subsidiaries filed the DHCP Bankruptcy Petitions as contemplated by the DHCP RSA entered into on February 8, 2019 as discussed further below. The Company intends to continue to operate its businesses during the pendency of the Chapter 11 proceedings.
The terms “Ditech Holding,” the “Company,” “we,” “us” and “our” as used throughout this report refer to Ditech Holding Corporation (Successor) and its consolidated subsidiaries after the WIMC Effective Date, and/or Walter Investment Management Corp. (Predecessor) and its consolidated subsidiaries prior to the WIMC Effective Date.
Emergence from the WIMC Reorganization Proceedings
On November 30, 2017, Walter Investment Management Corp. (Predecessor) filed the WIMC Bankruptcy Petition under the Bankruptcy Code to pursue the WIMC Prepackaged Plan announced on November 6, 2017. On January 17, 2018, the Bankruptcy Court approved the amended WIMC Prepackaged Plan and on January 18, 2018, entered a confirmation order approving the WIMC Prepackaged Plan. On February 9, 2018, the WIMC Prepackaged Plan became effective pursuant to its terms and Walter Investment Management Corp. emerged from the WIMC Chapter 11 Case and changed its name to Ditech Holding Corporation (Successor) and on February 12, 2018, our newly issued common stock commenced trading on the NYSE under the symbol DHCP. From and after effectiveness of the WIMC Prepackaged Plan, we have continued, in our previous organizational form, to carry out our business.
On the WIMC Effective Date, all of our previously existing equity interests, including our Predecessor common stock, were canceled. Our obligations under our previously outstanding Convertible Notes and Senior Notes, except to the limited extent set forth in the WIMC Prepackaged Plan, were also extinguished. Previously outstanding equity and debt interests were exchanged as follows:
Senior Notes were exchanged at a rate of 464.11293167 Second Lien Notes and 0.18564517 shares of Convertible Preferred Stock per $1,000 principal amount of Senior Notes;
Convertible Notes were exchanged at a rate of 8.76919841 shares of Successor common stock, 14.94011581 Series A Warrants and 11.85465711 Series B Warrants per $1,000 principal amount of Convertible Notes; and
shares of common stock were exchanged at a rate of 0.05689208 shares of Successor common stock, 0.09692659 Series A Warrants and 0.07690920 Series B Warrants per share of Predecessor common stock.
Accordingly, we issued:
to the holders of Predecessor shares of common stock, an aggregate of 2,126,250 shares of Successor common stock, 3,622,500 Series A Warrants and 2,874,375 Series B Warrants;
to the holders of Senior Notes claims (as defined in the WIMC Prepackaged Plan), $250.0 million aggregate principal amount of our Second Lien Notes and $100.0 million aggregate initial liquidation preference of Mandatorily Convertible Preferred Stock, convertible into common stock at a ratio of 114.9750 per share of preferred stock; and
to the holders of Convertible Notes claims (as defined in the WIMC Prepackaged Plan), an aggregate of 2,126,250 shares of Successor common stock, 3,622,500 Series A Warrants and 2,874,375 Series B Warrants.